What's the Difference?
Getting pre-approved for a mortgage is one of the first steps to buying your next home. Without making proper arrangements, many potential buyers are drawn to believe that a lender who pre-qualifies them, has actually pre-approved them for the loan. There is a big difference between the 2 terms. If you are scratching your head wondering how they work, read more below. It’s important to understand these terms to avoid any complications with your upcoming purchase.
Getting pre-qualified is the first step in the home mortgage process. This is pretty straight forward. Here you provide a bank or lender with your overall financial overview. This would include your assets, debt and income information. After reviewing these documents, a lender can provide you an estimated budget that you would qualify for. A mortgage pre-qualification is commonly performed over the phone or online. Typically, there is no cost for this. Loan pre-qualification doesn’t review your credit and is not a close look at your ability to purchase a home.
Your pre-approval is the next stage, and is a much closer look into your financials. This is where you fill out a mortgage application, then provide the bank or lender with the required documents for a more elaborate look into your financial history and current credit score. After reviewing the information, the lender can provide you a specific mortgage budget that you qualify for. You will be much more informed about the interest rate you will be working with. This is where you would be able to lock in a specific rate.
Get Pre-Approved Today!
Lock in your interest rate.
When you are pre-approved for a mortgage, you can guarantee the quoted rate for up to 120 days! If rates go down, you’ll get the lowest rate in effect for your term.
With a quick call or email, you’ll know:
- Your interest rate and regular payment dollar amount
- What you will be paying toward principal and interest
- How long it will take to completely pay off your mortgage